Gamesa lays off 73 Cambria workers

Company: Furloughs will be ‘temporary’

July 4, 2012

EBENSBURG - A national drop in demand for new wind turbines prompted Spanish-based company Gamesa to announce a new round of furloughs at two of its Pennsylvania plants - one in Ebensburg.

A total of 165 employees at Gamesa's production facilities in Bucks and Cambria counties are expected to be laid off starting in late August or early September, Gamesa spokesman David Rosenberg said.

"Basically, we're adjusting our production capacity at the two facilities to reflect the current U.S. market conditions," Rosenberg said.

"In our minds, it's temporary," he added.

The Cambria County facility, which manufactures the 144-foot turbine blades, will lose 73 employees when the layoffs take effect in the fall.

In Bucks County, 92 employees are slated to lose their jobs. The Fairless Hills facility produces the turbine's 85-ton nacelle, which contains the turbine's gearbox, generator and other electrical components.

Officials from United Steelworkers of America Local 2635, which represents the Cambria County workers, did not return calls for comment.

The union members were notified 60 days ahead of the layoffs, Rosenberg said.

The furloughs are in response to a decline in new turbine orders in connection with the expiration of the American Renewable Energy Production Tax Credit, Rosenberg said.

The corporate tax credit, which provides 2.2 cents per kilowatt hour for wind and geothermal energy, is set to expire at the end of 2012.

Current production at Gamesa's facilities is still ongoing for 2012 orders. But the demand for new turbines beyond 2012 dropped significantly, pending the layoffs, Rosenberg said.

"We produce only to order," Rosenberg said. "Everything that's being produced is for projects that we have in-house that are scheduled for commissioning for 2012."

With the pending tax credit expiration at the end of the year, the company has seen a significant drop in demand for new turbines.

The Ebensburg plant was established in 2005 and began production or turbine blades in 2006, said Kurt Knaus, a PR representative from Ceisler Media & Issue Advocacy, which represents Gamesa.

Each blade manufactured at the Ebensburg plant weighs 12,786 pounds, Knaus said. Those blades, and the nacelles manufactured in Bucks County, are installed at domestic wind farm installations, he said.

The company also exports the turbines to Canada, Mexico, and locations in South and Central America, Knaus said.

The company does expect additional export orders to increase but remains committed to the U.S. market, Rosenberg said.

"We consider this to be a temporary action," Rosenberg said. "Unfortunately ... occasionally the wind industry goes through these little hiccups."

In 2009, Gamesa announced 141 workers would lose their jobs at the Ebensburg facility.

Since then, the industry, which Rosenberg described as "very young," bounced back with reduced costs for turbines. Between 2008 and 2011, the industry reduced their costs by 25 percent, he said.

The company hopes the production tax credit will be renewed and demand for new turbines will bring the 165 employees back to work.

"We are on our way to being extremely competitive with other forms of energy," Rosenberg said. "We just need a little more time to continue to invest and improve the technology."